Heterogeneity in consumer price stickiness. A microeconometric investigation

Denis Fougere, Hervé Le Bihan and Patrick Sevestre ()
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Patrick Sevestre: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

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Abstract: We examine heterogeneity in price stickiness using a large, original, set of individual price data collected at the retail level for the computation of the French consumer price index. For that purpose, we estimate at a very high level of disaggregation, a piecewise-constant hazard model, as well as competing-risks duration models that distinguish between price increases, price decreases, and product replacements. The main findings are the following: (a) at the product-outlet-type level, the baseline hazard function of a price spell is nondecreasing; (b) cross-product and cross-outlet-type heterogeneity is pervasive, both in the shape and the level of the hazard function as well as in the impact of covariates; (c) there is strong evidence of state dependence, especially for price increases; (d) there is an asymmetry because determinants of price increases differ from those of price decreases.

Keywords: DURATION MODELS; HAZARD FUNCTION; STICKY PRICES (search for similar items in EconPapers)
Date: 2007-07
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Citations: View citations in EconPapers (17)

Published in Journal of Business and Economic Statistics, 2007, 25 (3), pp.247-264. ⟨10.1198/073500107000000214⟩

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Related works:
Journal Article: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2007)
Working Paper: Heterogeneity in consumer price stickiness. A microeconometric investigation (2007)
Working Paper: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2006)
Working Paper: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2005)
Working Paper: Heterogeneity in Consumer Price Stickiness: A Microeconometric Investigation (2005)
Working Paper: Heterogeneity in consumer price stickiness: a microeconometric investigation (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00278922

DOI: 10.1198/073500107000000214

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